State evaluating bids for new online system

LANSING (Detroit Free Press)- The State of Michigan is evaluating bids for a new online procurement system as it plans to spend hundreds of millions of dollars replacing and upgrading outdated state computer systems in the next several years.

Officials are assessing nine proposals they recently received to supply the state with an e-procurement system, said Kurt Weiss, a spokesman for the Department of Technology, Management and Budget.

They also are mulling replacement of the government's main accounting system, which could cost $80 million to $150 million, Weiss said.

"We're looking at the whole procurement system, from A to Z," Budget Director John Nixon said in an interview.

The e-procurement system and other changes will improve the efficiency of calling for bids on more than $3 billion in goods and services the state purchases each year, make it easier to find cost savings and enhance transparency by making it easier to put contracting information online, Weiss said.

He said he cannot provide a cost estimate for the new system, but said state officials believe it will save millions of dollars.

The state currently has a Bid4Michigan website where vendors find out about state contracts and in some cases, make online bids. But it's not linked to the state's internal purchasing system, which identifies items the state needs to buy and manages their acquisition, or the state's electronic accounting system, the Michigan Administrative Information Network (MAIN).

The e-procurement system -- which should be online in early 2013 -- will replace Bid4Michigan and parts of the other two systems, tying all three functions together for the first time, Weiss said.

The new system will allow for better data tracking to help the state know how and when to get the best deals, he said. It also will allow for quicker turnarounds on bids and easier communication between state purchasing officials and vendors, which will increase efficiency.

Local governments and school districts will be able to use the system to make their purchases, resulting in further savings, he said.

Even under e-procurement, hard-copy binders will be needed for complicated contracts with hundreds of pages and numerous exhibits, Weiss said. But the state will receive bids online whenever possible.

The state's 2013 budget included $48 million set aside to replace aging computer systems. Nixon said the state hopes to set aside a similar amount each year for the next several years.

A significant expense will be replacing the MAIN central accounting system, which was purchased for about $110 million in 1993, Weiss said.

The current system doesn't capture all state payments, making data analysis difficult.

And because it was built before the Internet was widely used, it doesn't link to the Web. That means the state must manually put contract information on the Internet as it tries to increase public transparency.